Chico vs. The Man
How a local health center fought insurance companies statewide—and won
Jeanette Wemette takes cancer seriously. She doesn’t live in constant dread, but the disease has touched her deeply. Breast cancer claimed an aunt and a friend who was diagnosed in her 20s and battled for 17 years. Other friends and relatives fought cancer, too.
For the past decade, Wemette—who turned 50 in May—has gotten annual mammograms to screen for breast cancer.
“It’s not anything that I’m particularly concerned with; it’s just making sure.… In this day and age, it’s always in the back of your mind until you find out that everything is clear.”
She said so on a recent morning, seated comfortably but poised—her tone measured, attention focused, expression even. Wemette spoke willingly—candidly—about her life story.
An alumna of Chico State, she moved to the Bay Area after college, most recently living in Fairfield while working for a wine company in Napa. In 2009, she reconnected with a college friend; she married him in 2013 and moved back.
She continues to work for the same employer, as a telecommuter, only needing to spend two days every other week in the corporate office. As part of her life in Chico, she brings her dog, a king cavalier spaniel trained for therapy visits, to the Enloe Regional Cancer Center as a comfort animal.
In the Bay Area, Wemette had received her medical care from Kaiser Permanente. Since Kaiser operates no facilities in the North State, she switched health insurers to Anthem Blue Cross. She sought an in-network provider for mammograms and found North State Radiology, which operates Chico Breast Care Center.
Her first local screening, in 2015, was covered fully. That’s because it was preventive—to prevent illness—and a standard, two-dimensional mammogram: several X-rays, shot from specified angles, with the breast compressed to spread the tissue as evenly as possible. Standard for Wemette, too, was an additional screening via ultrasound due to the density of breast tissue; Anthem paid for this as well.
The next year, though, Wemette hit a snag—one that tripped up all of the center’s privately insured patients receiving mammograms. It proved the bone of contention in a David-versus-Goliath struggle, with Chico as the battleground, altering health care statewide.
North State Radiology opened the Chico Breast Care Center facility in July 2015. CBCC occupies a two-story building on The Esplanade, adjacent to the North State Radiology complex, a block from Enloe Medical Center. There, women can receive all services related to breast health—screenings, biopsies, surgeries—under one roof.
Across the board, North State Radiology replaced 2-D mammography with 3-D mammography, also known as digital breast tomosynthesis (or DBT). Unlike 2-D, the 3-D technology composes views from sequences of X-rays taken with the breast positioned as uncompressed as possible. This delivers a more refined image for the radiologist to assess, akin to magnetic resonance imaging (MRI) that also turns a series of “slices” into composites.
The U.S. Food and Drug Administration approved 3-D mammography in 2011, and soon after the federal government decided Medicare and Medicaid (Medi-Cal in California) would cover the procedure starting in 2015. In the interim, studies showed the technology revealed smaller cancers and reduced the number of follow-up screenings for “false positives”—known as “callbacks”—versus 2-D.
“Now, with the clarity of 3-D, in good conscience we cannot go back or ever go and do 2-D mammography,” said Dr. James Schlund, director of the Chico Breast Care Center. He’s a radiologist who’s lived in Chico since 1994. Expecting all insurers to accept technology already approved by the government, he and the other principals at CBCC designed their facility with 3-D exclusivity in mind.
So, when Wemette came for her 2016 screening, she got a 3-D mammogram. She didn’t need an ultrasound, as DBT scanning accommodates varying tissue thicknesses. The single appointment sufficed.
The ease of the process ended, however, when she received a statement from Anthem listing her as responsible for $109. The insurer would cover $318, meaning she’d pay 25 percent of the expense.
“At that time, I just thought it was a mistake,” she said. “I’ve had claims denied in the past, or not paid. They have codes at the bottom of the billing statement, and I thought that maybe it was just billed incorrectly by the doctor’s office.”
She contacted the clinic’s billing department and learned her insurer was denying all 3-D claims, only paying amounts for 2-D. In fact, all private insurers with local contracts were—none followed the government’s lead.
Though CBCC offered to write off the difference, Wemette appealed the denial. She won. Anthem paid, but with a proviso stating that this decision would not set a precedent for future mammograms.
Sure enough, come 2017, Anthem denied the claim for Wemette’s 3-D mammogram. This time—as part of a coordinated effort by radiology centers statewide, spearheaded by CBCC—she let the clinic handle her appeal. Once again, Anthem lost; however, in a new wrinkle, Anthem reclassified her mammogram (labeling it “diagnostic” versus “preventive”) after the appeal so as to shift more cost onto her (via co-pay and deductible).
The $109 she paid this year did not come back, though her employer’s benefits broker is lobbying Anthem on her behalf to get the money for her.
Reflecting on her experience, from a patient’s perspective, Wemette said: “It just feels like a fight we shouldn’t have to have.”
Dawn Wright feels the same way. Chico Breast Care Center’s billing manager for much of this fight, Wright worked in the business office of North State Radiology for 25 years before leaving last August. She’s now a telecommuting employee of a Wisconsin-based billing company that serves radiologist clients across the country.
Wright’s motivation is more professional than personal. Breast cancer hasn’t touched her life, nor the lives of anyone close to her. She cares about people, though, and at the outset found herself spurred to challenge a disparity of health care based strictly on insurance type (here, public versus private).
“To say that this group of people deserve to have [3-D mammography] as a benefit and these people don’t, it’s just ridiculous,” Wright said during a recent visit to the clinic. “Every woman deserves the benefit, and I don’t think it should be an added expense for them.
“Truly, it bothered me personally, because you’ve got these insurance carriers that honestly are making money hand over fist, and this tomography was in all honesty saving them money because it reduced callbacks for false positives … so in essence these insurances weren’t being billed for these additional services—they were saving money by this equipment—but they didn’t want to acknowledge it.”
Research has demonstrated both effectiveness and cost-effectiveness of 3-D mammography.
Fifteen physicians spanning multiple institutions analyzed nearly a half-million mammograms and determined the 3-D technology increased detection of invasive cancers by 41 percent and reduced callbacks by 15 percent. (Their results appear in a 2014 Journal of the American Medical Association article.) A clinical trial with nearly 200,000 participants, also across multiple centers (with results published in 2016), established “statistically significant” improvements as well.
Scott Pohlman, associate director of outcomes research for the health-tech firm Hologic, manufacturer of 3-D mammography machines, said by email that while those two are the largest, “there are a dozen or so other studies showing similar results.”
Meanwhile, another study found that, even with the increased expense of 3-D technology, insurers saved $28 per patient—translating to over $2 million in annual savings for an insurance company. That research, published online in 2015, including on the Journal of the American College of Radiology website, is titled “Value analysis of digital breast tomosynthesis for breast cancer screening in a commercially-insured US population.”
These reports came out several years after the FDA’s approval of 3-D mammography. Some, not all, preceded the October 2014 decision by the Centers for Medicare and Medicaid Services (CMS) to cover the tests. An agency of the U.S. Department of Health and Human Services, CMS administers health coverage for 100 million Americans.
“CMS did their due diligence and looked at all of the published literature,” Schlund said. “All the breast care centers took notice, because we knew the landscape had now changed: Even [amid] the inertia of the federal government, they looked at the technology and said, ‘This is valid technology; it’s ready for prime time.’”
Under the federal order, payments would commence for 3-D mammograms performed starting Jan. 1, 2015.
“It was a remarkable time,” Schlund said. “And that is why we got angry.
“The commercial payers did not follow suit. The commercial payers were sitting in the middle of the equation, and they knew it. On one side, they were telling patients this is ‘experimental and investigational’ and that ‘the evidence does not support our paying for it; it’s too new.’ And, on the other hand, centers like ours, in the moral conscience of medicine, were providing 3-D knowing full well that we weren’t going to get paid for it because we couldn’t see our way clear to do anything else—and the insurance companies benefited.”
The $100 difference between 2-D and 3-D billing is a matter of scale. For a local imaging center, that’s a good percentage of income; for multibillion-dollar corporations, in Schlund’s view, it’s “a rounding error,” even accounting for thousands of patients.
On the other side of the ledger are insurers’ costs for callbacks, which Schlund quoted at $1,200 each, and treating invasive breast cancers that go undetected. Around 1 in 8 American women, or 12 percent, develop invasive breast cancer. Schlund estimated treatment for a T1 cancer (smallest/compact) runs an insurer $54,000; T4 (largest/spread), $215,000.
“Even setting aside the tremendous benefit of finding small, curable cancers, the payers were just killing it [financially] by doing nothing,” he said.
When Chico Breast Care Center patients began receiving denial letters, the clinic already was prepared to fight. Wright, the business office and the front desk staff guided their clients through the appeals process. Concurrently, Schlund and the medical team mounted a persuasion campaign—first with state regulators, then insurance company policymakers (Anthem and Blue Shield of California being the two largest carriers).
In California, unlike most other states, oversight of private insurers does not fall to the insurance commissioner. Instead, the Department of Managed Health Care (DMHC) holds this authority. When patients—i.e., customers—have problems with commercial carriers, DMHC handles their appeals.
California has another quirk. For the majority of circumstances in which an insurer denies a claim, the patient must go through an appeal with the company before the DMHC. “Experimental and investigational” claims are distinct: A drug or procedure deemed as such by the insurer may be appealed directly to the DMHC by requesting an independent medical review. Physicians in the same field, not connected to either party, scrutinize the case and judge whether to uphold or overturn the denial.
Who’s heard of this provision? Apart from professionals, hardly anyone, Schlund said—only entrenched appellants, “the people who are so completely angry that they will go to the end of the world to figure this thing out.”
Chico Breast Care Center performs hundreds of mammograms a week. With the stack of denials growing, the clinic decided to present the issue directly to the DMHC. Schlund invited Mary Watanabe, deputy director of health policy and stakeholder relations, to visit.
“It was the most shocking moment, I think, of my life,” he said.
Schlund solicited the added expertise of Robert Achermann, executive director of the California Radiological Society, the Sacramento-based chapter of the nonprofit American College of Radiology; and Hologic, which made the equipment at his center. He, Achermann and Veronica Miller—health economics manager at Hologic—spent the afternoon of Feb. 10, 2016, with Watanabe and her team reviewing the technology, studies and cases.
“They [Watanabe and her associates] were impressed, and they understood the value to the patient and the plight of the breast care centers,” Schlund said. “But they cannot necessarily—and, I agree, appropriately—side; they have a regulatory oversight function that cannot be biased.
“It almost hurts me to sing the praises of government; they’re just right.”
The meeting—which DMHC spokesman Rodger Butler confirmed took place, without characterizing its content—wasn’t moot, though. Toward the end, Schlund asked if breast care centers such as his could appeal on patients’ behalf. Specifically, could the patient sign a form at the time of service allowing the clinic to request an independent medical review on her behalf should her insurer deny the claim?
Watanabe’s answer in the affirmative permitted the Chico center to take charge of the process.
“The Department of Managed Health Care was very responsive and helpful on getting all of these tracked and filled out,” said Wright, CBCC’s former billing manager. “Not only was it a burden on us, honestly, sending 3 and 400 appeals at a time, it was a burden on them as well, because they had to ramp up their staffing to be able to cover all of the [independent medical reviews] that were being sent in.”
Schlund estimated that breast centers statewide submitted 10,000 reviews, with over 3,000 fully adjudicated—and Chico accounting for the largest share of any single location.
Wemette appreciated not needing to dispute the denial herself. She felt she’d done her “due diligence” as she “went to a facility that was considered in-network.” Her insurer had—has—a contract with CBCC, Wemette continued, so it’s “obligated to pay for whatever technology was used at that facility.
“I could maybe see [a denial] if I chose on my own to go to an out-of-network facility—that’s a risk you take as a patient—but I didn’t do that.”
As reviews moved through the system, a trend emerged: Patients kept winning. Not only were insurers responsible for the payment, they also had to pay the cost of the independent reviews (approximately $300 each) and incur negative notations on their corporate compliance reports with the DMHC, which tracks complaints on health plans’ operations.
The companies switched gears.
Dr. Tony Van Goor, Blue Shield of California’s senior medical director, brought his team from San Francisco to Chico on July 22, 2016.
“The second most remarkable moment of my life,” Schlund said, noting how Van Goor bypassed institutions such as Stanford and UCSF to evaluate 3-D mammography in Chico.
Four months later, Blue Shield became the first private carrier to cover the procedure in California.
“They also made [the decision] retroactive, which was remarkable as well,” Schlund said. “So it’s not necessarily the evil empire here; there are moments of appropriateness. Although …”
Schlund recalled a May 2016 conversation with a Sacramento region representative of Blue Shield, documented in an email the man sent as a follow-up, attempting to dissuade Chico Breast Care Center from the independent medical review route. Imitating a mobster to characterize the tone, Schlund read: “To submit complaints to DMHC … will most likely result in no positive outcome.”
That’s pale compared to the intimidating image projected by “the Armani suits guys” dispatched by Anthem. That insurer declined to visit Chico but would meet Schlund at the DMHC offices, near the state Capitol. He went to Sacramento on Aug. 24, 2016. Achermann, from the radiological society, and Pohlman, from Hologic, also came.
Schlund encountered Dr. Jacob Asher, Anthem’s chief medical officer; Terry German, executive counsel; and a principal lobbyist. Schlund said he felt like a young U.S. hockey player facing off against the Soviets in the 1980 Olympics—but there was no replay of the movie Miracle. The heavy hitters thanked him for the information “and nothing changed.”
At least not until this year. In February, Anthem got hit with a lawsuit from a Sacramento woman, Darla Moe, claiming she was denied 3-D mammography despite her doctor’s recommendation. Moe, diagnosed with breast cancer, originally intended to launch a class action suit but by July had entered mediation with Anthem.
Whether coincidental or related, Anthem announced in June that it had changed its policy regarding 3-D mammograms—that, as of Feb. 20, the technology no longer would be deemed experimental and investigational, nor medically unnecessary. In addition, effective June 6 for most customers and Aug. 1 for others, Anthem said in a notice that preventive screenings would be 100 percent covered.
The turn of events hasn’t been a full 180, however. According to Schlund, Anthem frequently classifies 3-D mammograms as diagnostic rather than preventive. Those are not covered 100 percent; rather, co-pays and deductibles apply, leaving patients such as Wemette partially financially responsible.
“They’re now laughing their butt off because the patients who were going to get 3-D were going to get slapped with a bill,” Schlund said. “Anthem had [maneuvered] to take away patients’ screening opportunities and then to financially abuse the patient, and then to have the patient turn around and be angry with us.”
The CN&R contacted Anthem as well as Blue Shield of California. Public relations representatives for each supplied statements rather than responses to specific questions for this article.
Suzanne Zegata-Meraz of Anthem wrote, in part: “Under federal guidance from the U.S. Preventive Services Task Force, digital breast tomosynthesis is not identified as a preventive benefit and insurers are not obligated to provide coverage of the technology as a preventive benefit with zero co-pay.
“However, due to potential confusion for the level of coverage of preventive 2-D mammograms and 3-D mammograms, Anthem is covering the 3-D mammograms as a preventive benefit for screening, which would mean that members would have zero co-pay for the service. The zero co-pay … was in place for most members by Aug. 1.”
Clinton McGue of Blue Shield, along with saying his company offers 3-D mammograms as a preventive benefit, acknowledged advantages.
“Three-dimensional imaging technology improves the detection of breast cancer, particularly in women with dense breast tissue that can mask subtle lesions in conventional mammograms,” he wrote. “The advanced screening method helps limit unnecessary biopsies, emotional stress, or a delay in diagnosis for our members.”
The 3-D mammography battle isn’t quite over. As of the CN&R’s deadline, one private insurer remained a holdout: Medicare Advantage. Meanwhile, patients (and centers) seeking redress from Anthem will find the process more challenging.
Since Anthem no longer considers the technology experimental and investigative, patients cannot bypass the company and go directly to the Department of Managed Health Care. Only after the insurer concludes its grievance procedure—which it controls—can a patient seek an independent medical review.
Besides, “you can only get an [independent review] on something that gets denied,” said Lynne Bussey, Chico Breast Center provider liason, and Anthem technically approves claims for 3-D mammograms.
Such coverage issues are not unique to 3-D mammograms … or Anthem … or California. (See sidebar.) Dr. Henry Abrons, board member of Physicians for a National Health Plan, told the CN&R by phone from Berkeley that the problem is systemic.
“This gets down to the conflict of interest, basically, that lies within an insurance company whose business model is to collect premiums, pay out the minimum amount in covered benefits, pocket the difference and use that profit to reward their employees and their shareholders—for whom the business of health insurance is an investment,” he said. “This is a basic contradiction: Health care is a service, and it should be funded as a social insurance program, not as a profit-making or money-making commercial program.”
Chico Breast Care Center finally has started receiving reimbursement for 3-D mammography, rather than getting 2-D-level payments from private insurers.
“I’m happy to be the most visible member of the team that made this true,” Schlund said. “But without our billing manager and our billing department, this would have never been true. Without the front office staff sitting down with patients … this would not have been true. There are unspoken heroes at every turn.”
The expense differential stems primarily from the equipment costing more; Schlund said the clinic was “running negative balances” while awaiting the change anticipated as inevitable. Had North State Radiology stuck with 2-D equipment, “we would have been profitable.”
But 2-D isn’t the same as 3-D. Schlund described examining a scan, slice by slice, and suddenly catching a glimpse of a speck not present on the previous or subsequent layer.
“This little smile breaks out on your face, because you realize that you just found a small curable cancer,” he said. “You’re like, ‘Oh my God!’ It’s so cool. And it happens virtually every day.”
One doesn’t need a medical degree to appreciate the technology. When waging her first appeal, Wemette researched mammography and found “everything in the medical community moving toward 3-D…. Everything I read said 3-D technology is more beneficial than 2-D technology.”
Her company just finished open enrollment for benefits. Wemette switched to Cigna, one with better coverage for 3-D mammograms.
“That’s one less thing I have to worry about the next time I have one.”